Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Tuesday, August 17, 2010

Tall Tales Of Brain Drain

Both policymakers and journalists must be good storytellers. Sometimes the narrative takes on a life of its own, shrinking the space of innovation. We say the same thing over and over to the point of incoherence. That's where the discussion of brain drain is now.

I cannot think of an industry or organization that would purposely export its most precious resource…and think it can survive. Our small towns are no different. We must strive to retain and attract back at least a significant portion of intellectual capital our strong rural schools and families have created. We should not see it as “selfish”. It is the difference between small towns that thrive versus those with shuttered main streets and closed schools.

Not only is such a policy selfish, it is harmful to the community. Thriving small towns also "purposely export" young talent. So do thriving big cities. The hinterlands need to think more creatively:

Ultimately we find that the overall consequences of high-skilled migration are beneficial for citizens of their sending countries, unless externalities are orders of magnitude larger than ever measured. As Bhagwati has noted, externalities are “the first refuge of scoundrels” in policy debates, given scant evidence as to their existence, let alone magnitudes. Certainly we believe such externalities of high-skilled individuals are less likely to manifest themselves in societies which repress the basic right of free movement – North Korea keeps most of its best and brightest from emigrating, but we hardly see large rates of innovation and growth as a result.

Discouraging the geographic mobility of labor is bad for everyone concerned, even small towns. Why are people shocked to discover that rural America encourages its best and brightest to leave? That's the case everywhere. Outmigration isn't evil, nor are the cities that suck up all the talent. Back to the World Bank study:

Our default story is that no good can come from brain drain. That's not true for the individual and it isn't necessarily the case for the community. As a result, we are unwilling to dig into the migration patterns and drum up returns on the investment in local human capital. If she leaves, then we lose. That's a tragedy.

Economists say the nearly $300 million income gap between outgoing and incoming workers is largely due to the flow of young workers into the region's urban core as older, higher-paid workers get married, start families and leave.

"The primary reason this exists has to do with the life cycle," said Ben Passty, director of the Applied Economics Research Institute at the University of Cincinnati. "Young people move to the city when they're younger and then to the suburbs in their higher earning years."

Melissa Nylander, a Clifton resident and California native, is at the front end of that cycle. She moved here two years ago with her boyfriend, a medical student, and went to work as a nanny and preschool teacher. She then decided to get a master's degree so she could get a better job in early childhood education.

When that happens, she'll be in position to earn more money and, in time, buy property and do all the things people do as they get older.

But she probably won't do them here.

Nylander said the county is affordable and nice, but it lacks the excitement of San Francisco, where she grew up, or Philadelphia, where she got her undergraduate degree. She also is worried about job opportunities here after a recent Internet search yielded less than a dozen appealing prospects, compared to hundreds in bigger cities.

"Cincinnati is OK, but I'm not sure it's where I'd want to stay," said Nylander, 24. "It's a transition point. It's a good place to get an education and then move on."

I'll start by pointing out that this article about Hamilton County migration is very good. It's full of useful information that readers could use in making informed policy decisions. It's also a horribly incoherent narrative that could undermine some excellent urban planning ideas.

Cincinnati is doing a good job of attracting well-educated young adults. That's what downtown development is supposed to do. A lot of this talent is staying in the region. The newspaper journalist actually mentions this fact. But the last two sections of the article seem completely ignorant of what was said in the introduction. We must return to our regularly scheduled "young people are leaving Cincinnati in droves".

Weird.

Every urban core suffers from life cycle outmigration. I'd track regional retention rates of urban core young adults. How typical is Melissa Nylander? I don't see anyone else asking this question. That's because politicians and reporters are dead set on telling the same story, again and again.